Not maxing out 401k, even though high income

[Anonymous]

Anonymous wrote:He's allowed to over contribute to "catch up"

This doesn’t kick in until 50s. Is there an income cap?

[Anonymous]

Anonymous wrote:

Anonymous wrote:DH is high income (over 500k) but not financially savvy. He said and I believe he thought he was maxing his 401k, but was only putting in 5000 for most of the last 20 years. I’m so disappointed. There’s no recourse for this, right? He wasn’t sharing his 401k balance with me, and I was surprised to hear how low it was.

The good news is that you are rich enough that this isn’t a huge problem.

But if it were me and I discovered this, I would start doing the taxes and handling the household investments. Clearly your husband is an idiot, albeit a highly remunerated one. What does he do?

Yes, I want to know what he does too.

I don't even believe that people like this exist. Unless he is like a professional athlete, where there is no correlation between intelligence and income, $500K is such a high salary that it seems unbelievable that he would think $5K was the maximum allowed in a 401(k) and, more generally, be so oblivious and uninterested in how to keep his family going if/when his 1%er salary goes away.

[Anonymous]

Please tell me he was investing in other vehicles.

OP do you work?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This would have been obvious if you were more involved in finances. Your planner didn’t give you financial statements? You never looked at a paystub or w2?

If my husband ever demanded my pay stubs to dictate how much I would be contributing to my workplace retirement plan, I think I might divorce him on general principle.

True, but isn't it part of the regular partnership conversation? How do we as a team plan for retirement and what do we need to do each year?

[Anonymous]

do you have other savings or investment properties? has he been saving cash to pay for college expenses or aggressively paying down a large mortgage instead etc.? there is nothing especially sacred about 401ks as a savings vehicle.

[Anonymous]

Every spouse should look at the yearly tax return and you can see the line for 401Ks being subtracted from gross income. If he's filing separate without a good financial reason and not letting his wife see his return, well that was the red flag 20 years ago.

What's really going to be painful is when she finds out she has to credit him 50% of her larger 401K, and he has to credit her 50% of his "underfunded" 401K.

Maybe time for her divorce attorney to hire a forensic accountant to make sure there aren't any hidden assets.

[Anonymous]

My wife and I know what we contribute. We both max it out. We file jointly. And we both became millionaires. We both have pensions so when we both turn 73, our income is going to sky rocket. We will have RMDs.

[Anonymous]

Anonymous wrote:Is he investing in some other ways? If the goal is early retirement 401K shouldn't be your only thing, it's limited to a certain age before you can take advantage of it. Growing your investments to get to financial independence earlier and be able to leverage the funds is another life plan which isn't less valid necessarily, just a matter of preference and how you feel about your career, your ability to keep on going till retirement age.

You need to start talking about your plans as a family, because he may not be on the same page with you?

Yea but at 500k, he should have had no problem doing BOTH.

[Anonymous]

Anonymous wrote:
Anonymous wrote:
This would have been obvious if you were more involved in finances. Your planner didn’t give you financial statements? You never looked at a paystub or w2?


If my husband ever demanded my pay stubs to dictate how much I would be contributing to my workplace retirement plan, I think I might divorce him on general principle.

I think you need to take a chill pill. I doubt that she "demanded pay stubs in order to dictate". I think anyone would have been shocked to find that their high paying spouse was contributing so little to a 401K! Her spouse left a whole lot of money behind! It's not about her completely. He screwed himself by not taking those tax breaks.

[Anonymous]

So he lied to you OP? About maxing out his 401K?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DH is high income (over 500k) but not financially savvy. He said and I believe he thought he was maxing his 401k, but was only putting in 5000 for most of the last 20 years. I’m so disappointed. There’s no recourse for this, right? He wasn’t sharing his 401k balance with me, and I was surprised to hear how low it was.

The good news is that you are rich enough that this isn’t a huge problem.

But if it were me and I discovered this, I would start doing the taxes and handling the household investments. Clearly your husband is an idiot, albeit a highly remunerated one. What does he do?

Yes, I want to know what he does too.

I don't even believe that people like this exist. Unless he is like a professional athlete, where there is no correlation between intelligence and income, $500K is such a high salary that it seems unbelievable that he would think $5K was the maximum allowed in a 401(k) and, more generally, be so oblivious and uninterested in how to keep his family going if/when his 1%er salary goes away.

You may be new to DCUM. Many UMC folks here post stupid financial questions that make you wonder how they are making that much money.

[Anonymous]

Sadly, I believe this, because my parents (both doctors and making good money) are terrible with money: like not contribute one year for retirement to buy a new fancy car upfront. Do you have a financial advisor, OP? Your family might need one

[Anonymous]

Anonymous wrote:My wife and I know what we contribute. We both max it out. We file jointly. And we both became millionaires. We both have pensions so when we both turn 73, our income is going to sky rocket. We will have RMDs.

How old are you now? And when did you start maxing out? I feel like I’m never going to get there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DH is high income (over 500k) but not financially savvy. He said and I believe he thought he was maxing his 401k, but was only putting in 5000 for most of the last 20 years. I’m so disappointed. There’s no recourse for this, right? He wasn’t sharing his 401k balance with me, and I was surprised to hear how low it was.

The good news is that you are rich enough that this isn’t a huge problem.

But if it were me and I discovered this, I would start doing the taxes and handling the household investments. Clearly your husband is an idiot, albeit a highly remunerated one. What does he do?

Yes, I want to know what he does too.

I don't even believe that people like this exist. Unless he is like a professional athlete, where there is no correlation between intelligence and income, $500K is such a high salary that it seems unbelievable that he would think $5K was the maximum allowed in a 401(k) and, more generally, be so oblivious and uninterested in how to keep his family going if/when his 1%er salary goes away.

My guess is doctor.

[Anonymous]

I have log-in access to spouse’s 401k account and online pay stubs. I’ve caught when employer mistakenly failed to make the 401k contribution for one paycheck (it was a widespread error).

It’s all both of our money, and I monitor it as such. Spouse has no qualms about this. They have access to my stuff as well.